Blair to EU: Modernize or Fail

British Prime Minister Tony Blair says the European Union is suffering from a crisis of leadership and must reform if it is to successfully face the challenge of globalization. Mr. Blair laid out his priorities in Brussels as Britain prepares takes over the EU presidency next week.

Tony Blair gestures addresses media at European Parliament in Brussels

Tony Blair's message to the European Union is that it must change the way it does business if it is to survive.

He told the European Parliament that the people of Europe are ahead of the continent's politicians in recognizing the need for change.

"It is time to give ourselves a reality check to receive the wake-up call," he said. "The people are blowing the trumpets around the city walls. Are we listening? Have we the political will to go out and meet them so that they regard our leadership collectively as part of the solution and not part of the problem?"

Mr. Blair's message comes as the EU wonders how it can get out of a crisis caused by French and Dutch voters' rejection of its constitution and its failure at a summit last week to agree on a long-term budget.

"In every crisis there is an opportunity. There is one here for Europe now, if we have the courage to take it," he said.

But for Mr. Blair, the issue is bigger than the constitution or the budget. It is that Europe must adapt itself to changing times in order to compete economically, not just with the United States but also with such rising giants as China and India.

Mr. Blair has been accused by the French and the Germans, among others, of wanting to destroy Europe's welfare state and impose unfettered capitalism across the continent. His critics also say Britain wants the EU to be a big common market and is not interested in closer political integration. Mr. Blair said those criticisms are unfair.

"The issue is not between a free market Europe and a social Europe, between those who want to retreat to a common market and those who believe in Europe as a political project. This is not just a misrepresentation. It is to intimidate those who want to change Europe by representing the desire for change as a betrayal of the European ideal," he said.

The British leader said his aim is not to kill Europe's highly regulated social model but to change it.

"What type of social model is it that has 20 million unemployed across Europe? The purpose of our social model should be to enhance our ability to compete, to help our people cope with globalization, to let them embrace its opportunities and avoid the dangers," he said.

Mr. Blair's first challenge is to try to secure a deal on the EU's budget for the six-year period that begins in 2007. He will have difficulty doing that because he has insisted on maintaining a special rebate Britain gets for not receiving as much as France and Germany in farm subsidies. He says he is prepared to negotiate about the rebate only if other EU members are willing to cut back on the agricultural handouts that take up 40 percent of the EU budget. And France is unwilling to do that.

But diplomats say that, even if Mr. Blair cannnot get a budget deal, he can at least start a Europe-wide debate over the economic policies Europe needs for the future.